Analyst: NAND market to 'collapse'

SAN FRANCISCO - At the 2011 International Solid-State Circuits Conference (ISSCC) here, Hynix, Samsung and Toshiba-SanDisk separately provided more details about their previously-announced, cutting-edge NAND parts.

And for some time, NAND flash vendors have seen stunning growth, due to strong demand in the mobile, tablet PC, solid-state storage (SSD) and other product markets.

But don’t look now, the NAND flash party may be nearly over. Hynix, Micron, Samsung and Toshiba have or will ramp up new NAND fabs-a move that could cause a capacity glut and falling prices.

''We’ve been calling for a collapse (in the NAND market) in the second half of this year,’’ said Jim Handy, an analyst with Objective-Analysis.

Demand is expected to remain strong in NAND. Average selling prices (ASPs) for NAND have been flat for over a year, but ASPs are expected to collapse in the fourth quarter of 2011, Handy said at ISSCC.

At present, NAND sells for $1.60 per gigabyte. By mid-2012, NAND is expected to fall and hit $0.65 per gigabyte, a 40 percent drop, he said.

The problem is that there is too much fab capacity coming online. Micron Technology Inc. is ramping up a new NAND fab in Singapore.Toshiba Corp. has announced a new fab,dubbed Fab 5.And Samsung Electronics Co. Ltd. is reportedly readying a new fab, dubbed Line 16.

At ISSCC, meanwhile, Toshiba and SanDisk presented a paper about a 151-mm(square), 64-Gbit device, based on multi-level-cell (MLC) and 24-nm technology.

Hynix Semiconductor Inc. talked about a 32-Gbit MLC line based on the technology. And market leader Samsung Electronics Co. Ltd. talked about a 64-Gbit, three-bit-per-cell line based on 27-nm.

You can see my assumptions, clearly I was going for ball park, looks I was not too far off. $20 billion is still around 3 fabs (or not even, there is an 8.9 billion price tag reported by Toshiba), so I doubt it would help to have everyone rush at once.

Hi NAND_analyst! Send me your forecast on NAND. I will edit and post it. I will post other forecasts from analysts as well. I ALWAYS welcome different points of view. (It just so happen I ran into Jim at ISSCC. He had the guts to make a forecast-AND CALL A DOWNTURN.) Just send your forecasts to the following address: mark.lapedus@ubm.com

Hi NAND_analyst! Send me your forecast on NAND. I will edit and post it. I will post other forecasts from analysts as well. I always welcome different points of view. (It just so happen I ran into Jim at ISSCC.) Just send your forecast to: mark.lapedus@ubm.com

Another missing point in this article is the "tipping point." Currently, SSDs are being adopted incrementally, in more of an evolutionary transition. They will continue to slowly grow in popularity and adoption until the market "collapses" and prices dive for the ground. That's the tipping point.
From then on, the transition from HDDs to SSDs will leap into revolutionary speed. The entire equation of supply / demand and growth capacity will change at that point and every bit of current research data on the industry will be rendered obsolete.

A market of $14b, and big enough for only 2 fabs, huh? Funny, there was close to $20b of revenue for NAND vendors in 2010, and that doesn't include controllers, which are key for NAND.
It is hard to take your post seriously.

Even if it does affect downward pressure on the price, NAND will still make money by selling in greater quantities. The demise of NAND flash will more likely be that it is made obsolete by memristors or some other superior technology, meaning it will be profitable for some time to come.

In a discussion I had with Jim Handy he mentioned a 60% decline. The 40% number was likely a misquote.
Jim does his homework and I would take his word on this. The forecast is definitely in line with past price collapses for NAND Flash.